Start-up simulation – Financing
Note: This worksheet is part of the “Start-up Simulation” series. This series consists of eight worksheets with different thematic focuses that guide your learners through the process of developing their own start-up.
Objective:
The worksheet aims to introduce learners to the basics of corporate finance and enable them to develop a simple financial plan for their own business idea.
Content and methods:
Learners explore different types of financing for start-ups and examine one in detail. The main part of the worksheet focuses on practical financial planning, in which learners record fixed and variable costs, set a price, draw up a sales plan, and calculate the break-even point in order to convince a fictional investor of their start-up.
Skills:
- Understanding of financing concepts and instruments
- Ability to calculate costs and plan sales
- Analytical thinking to assess the viability of a business model
- Independent and solution-oriented work
Target group and level:
Grade 9 and above
57 other teachers use this template
Target group and level
Grade 9 and above
Subjects
Start-up simulation – Financing
Note for teachers
These worksheets guide students through a flexible teaching project on setting up their own start-up. They are designed to be ideal for teamwork, which is why the instructions and tasks are mostly in the plural form. The documents are structured according to key topics such as marketing, financing, and presentation, which allows for modular use: Depending on the time available, either a single topic can be explored in depth or the work can be divided among the team without having to follow a fixed order. Each worksheet combines concise theoretical input with practical exercises that students can apply directly to their own start-up project. At the end of each worksheet, there is also a glossary of the most important technical terms.
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Introduction
This worksheet will help you understand the most important aspects of financing and develop a solid financial plan for your own business idea.
Types of financing
Every start-up needs money to get started and grow. Finding the right financing is one of the biggest challenges. There are various types of financing available.
Financing start-ups – ways to obtain the necessary capital
Financing is one of the biggest challenges for start-ups. In the early stages, there is often little or no income, while at the same time high costs are incurred – for example, for product development, marketing, or personnel. Without sufficient capital, many young companies are unable to implement their ideas or survive in the market. That is why raising capital is a crucial step for the success of a start-up.
There are various ways to finance a start-up. Some founders rely on their own funds or support from friends and family. Others use bank loans, which can be difficult for young companies without collateral. Particularly typical for start-ups are types of financing such as business angels, who contribute not only money but also experience and contacts, or venture capital, i.e., risk capital from investors who believe in rapid growth. Crowdfunding platforms, where many people contribute small amounts, are also popular, as are government support programs and competitions that offer grants or prize money.
Choosing the right type of financing depends heavily on the stage of the start-up, the amounts needed, and the founders' goals.
📌 Now take a closer look at a specific type of financing. Read the text and answer the questions that follow.
Business Angels - Google
Business Angels are wealthy individuals who invest in young, innovative companies. They offer not only capital but also valuable industry knowledge and a strong network. This type of financing is particularly suitable in the early stage of a start-up, known as the seed phase, as it allows for initial development steps to be financed while benefiting from the experience of the Business Angels. A prominent example of a company that has benefited from Business Angels is Google. In the early days of the company, several angel investors, including Andy Bechtolsheim, invested $100,000, enabling Google to further develop its search technology.
The advantage of this financing method lies in the personal support and advice that goes far beyond mere capital provision. Business Angels often bring valuable contacts and market insights, which can be crucial for the successful development of a start-up. Additionally, they are willing to take risks that traditional banks often avoid. However, a disadvantage can be the transfer of company shares, which entails co-determination and may potentially limit the decision-making freedom of the founders:Innen.
Google utilized the support of Business Angels at a crucial phase when the concept was not yet fully established in the market. These investors helped not only financially but also enabled strategic partnerships and offered valuable advice for business development. Business Angels are particularly suitable when a start-up has an innovative idea that can be scaled quickly. However, they are less appropriate when the company is already firmly established in the market and is seeking larger financing rounds. Choosing a Business Angel should therefore be well-considered to find the right partner for the company's goals.
👥 Now work in groups.
📝Is this type of financing right for you? Explain your reasoning.
Financial planning
For most types of financing, it is necessary to convince investors, private individuals, or banks of your idea. Solid financial planning is essential for assessing the profitability of an idea and thus convincing others of its merits.
When planning your finances, you look at your costs and expected sales for a specific period. By summarizing this information in concrete figures, you can see whether your business model is viable.
- Fixed costs: Costs that are always incurred regardless of production volume or sales (e.g., office rent, insurance, salaries).
- Variable costs: Costs that depend directly on production or sales (e.g., material costs, shipping costs, commissions).
- Sales planning: Here you estimate how much revenue you will generate in a specific period (e.g., in the first year). This is based on assumptions about the number of products or subscriptions sold and the corresponding prices.
📌 Imagine that this investor is considering investing in your start-up. How would you convince her to invest in you?
Investor
💸 As a first step, record your fixed costs and variable costs in the table.
| Fixed Costs | Variable Costs |
|---|---|
📌Determine pricing
📝Task: Think about what price you want to charge for your product or subscription. Questions you should answer:
- Does the price cover the costs (fixed and variable costs) per unit?
- Is the price attractive to customers?
- What discounts or special offers could be available?
👉 Sample calculation:
- Fixed costs per month: $2,000
- Variable costs per unit: $10
- Planned selling price per unit: $25
- Profit margin per unit: $25 – $10 = $15
- Special offer: 10% discount → new price $22.50 → profit margin = $12.50
📝 Record the price and your notes here.
📌Create sales forecasts
- Estimate how many units you will sell in a month and in a year.
- Use this to calculate your monthly and annual sales.
👉 Sample calculation:
- Selling price per unit: $25
- Expected sales: 200 units per month
- Monthly sales: 200 × $25 = $5,000
- Annual sales: $5,000 × 12 = $60,000
📝 Record your sales planning here.
📌Calculate the break-even point
Task: Determine the point at which revenue covers expenses.
- How many units do you need to sell to make a profit?
- What measures could help you reach the break-even point sooner?
👉 Sample calculation:
- Fixed costs per month: $2,000
- Contribution margin per unit: $15 (from example above)
- Break-even volume: $2,000 ÷ $15 ≈ 134 units per month
📝 Record your thoughts on the break-even point here.
📝 Now summarize the most important information for the investor in writing.
📌Glossary
🔍 Here you will find the most important technical terms from the worksheet. There is also space for you to note down additional terms and their definitions.
The most important technical terms
Angel Investor: An individual who provides capital for early-stage startups in exchange for equity in the company.
Bootstrapping: Funding a startup solely through personal finances or operating revenues.
Venture Capital (VC): Pooled investment funds that manage money from investors who seek private equity stakes in startups.
Crowdfunding: Raising small amounts of money from a large number of people, often through online platforms.
Convertible Note: A form of short-term debt that converts into equity, usually during a future financing round.
Burn Rate: The rate at which a startup spends its capital.
Equity Financing: Raising capital by selling shares of the company to investors.